4.10.16

Recession: EU chief advises Nigeria to devalue Naira

European
Union (EU) official Fillippo Amato yesterday advised the Federal
Government to devalue the Naira as part of measures to tackle the
economic recession.
Amato, Counsellor, Head of Trade and Economics Section of EU, stated
this yesterday in an interview with the News Agency of Nigeria (NAN).
The EU official said that recession could not be addressed with traditional development tools.
He said the recession was a recent development which was due to a
number of factors, including the fall in oil prices and resurgence of
militancy in the Niger Delta.
“To come out of recession, the country has to take brave decisions,
regardless of how unpopular they may be such as fully and effectively
devaluing the Naira.
“Devaluing the Naira is a measure, which will finally reassure investors and attract new capitals to the country.
“At the same time, it will further reduce imports, thereby removing
artificial forex restrictions, and removing any potential waste of
scarce resources such as the fuel subsidy.
“Improving security (in the Northeast and Niger-delta) and ease of
doing business are also key factors on which the government must
urgently work to re-launch the economy,’’ he said.
Amato said that EU had been at the forefront of aid for trade support activities in Nigeria and ECOWAS.
He said the most important programme the EU was implementing in
Nigeria with its partners – GIZ, DFID/Adam Smith International and UNIDO
– was the Nigeria competitiveness Support Programme.
“The programme aims at improving the quality of Nigeria products to comply with international standards.
“The programme is providing capacity building to several Ministries,
Departments and Agencies such as Ministry of Agriculture, Standards
Organisation of Nigeria, Consumer Protection Council, Nigerian Customs
Services and NADFAC.
“We support the trade institutions in the formulation and
implementation of a sound trade policy (support to the Federal Minister
of Industry, Trade & Investment, and Nigerian Customs Service).
“This is to improve the business environment, with pilot projects in
Kano and Kaduna to improve the procedures for obtaining land titles, and
business licences,’’ he said.
He said Nigeria also needed to take advantage of the devaluation of
its currency by diversifying its sources of foreign exchange revenue and
this mainly through boosting its non-oil exports.
Amato said that EU would increase its support to the country under the Economic Partnership Agreement (EPA) if ratified.
“EPA aims at boosting industrialisation and sustainable development
of West Africa, both through improved (predictable, transparent and
long-term) trade relations and through a development cooperation
component.
“In addition, on Sept. 14, the EU has launched a European External
Investment Plan which will further support private sector investments in
the African continent, including Nigeria.
“The plan will support investments in the continent by providing
targeted guarantees and ameliorating the investment climate and the
overall policy environment in partner countries.
“The Plan will be implemented through the new European Fund for
Sustainable Development, with EU funds totalling 3.35 billion Euros
until 2020.
“The EU Funds are expected to mobilise up to 44 billion Euros additional investments,’’ the official said.
He, however, advised Nigeria to take into consideration all the
opportunities the EPA would offer to Nigeria and communicate them to all
interested stakeholders.
“The role of the government is also to reassure all stakeholders that
there is no reason to be worried in the course of implementation of the
EPA.
“The government will use all instruments offered by the EPA to ensure
it will achieve its objective to promote industrialisation and
development of Nigeria and West Africa.
“The EU will do its part to ensure these objectives are achieved,” he said.
According to him, in a globalised world no country or regional community can ignore the destiny of its neighbours.
“The EU, in particular, due to its historic ties and geographic
proximity to West Africa, has a strong interest in promoting and
supporting West Africa’s development, well-being, prosperity and
stability.’’